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GROWING SMALL BUSINESS EXPORTS, GROWING 

U.S. JOBS 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

AND ENTREPRENEURSHIP 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

JUNE 18, 2014 

Printed for the Committee on Small Business and Entrepreneurship 

( 

Available via the World Wide Web: http://www.fdsys.gov 
(II) 

COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP 

ONE HUNDRED THIRTEENTH CONGRESS 

MARIA CANTWELL, Washington, Chair 

JAMES E. RISCH, Idaho, Ranking Member 

CARL LEVIN, Michigan 

MARY L. LANDRIEU, Louisiana 

MARK L. PRYOR, Arkansas 

BENJAMIN L. CARDIN, Maryland 

JEANNE SHAHEEN, New Hampshire 

KAY R. HAGAN, North Carolina 

HEIDI HEITKAMP, North Dakota 

EDWARD J. MARKEY, Massachusetts 

CORY A. BOOKER, New Jersey 

DAVID VITTER, Louisiana 

MARCO RUBIO, Florida 

RAND PAUL, Kentucky 

TIM SCOTT, South Carolina 

DEB FISCHER, Nebraska 

MICHAEL B. ENZI, Wyoming 

RON JOHNSON, Wisconsin 

JANE CAMPBELL, Democratic Staff Director 

SKIFFINGTON HOLDERNESS, Republican Staff Director 
(III) 

C O N T E N T S 

OPENING STATEMENTS

Page 

Cantwell, Hon.Maria, Chairwoman, and a U.S. Senator from Washington ....... 1 

Risch, Hon. James E., Ranking Member, a U.S. Senator from Idaho ................. 50 

Shaheen, Hon. Jeanne, a U.S. Senator from New Hampshire ............................ 52 

WITNESSES

Hahn, Eric, Vice President, Organizational Development, General Plastics 

Manufacturing Company, Tacoma, WA ............................................................. 3 

Tyler, Donald F., Director, Corfin Industries, LLC, Salem, NH .......................... 9 

Campbell, Robert, President and Chief Executive Officer, Alliance Solutions 

Group, Inc., Newport News, VA .......................................................................... 14 

Calhoon, Mark, Senior Managing Director, Business Services Division, Washington State Department of Commerce, Seattle, WA ........................................ 21 

Verdon, Jennifer, Manager of International Business, Idaho Commerce Department, Boise, ID .............................................................................................. 38 

Hendrix, W. Dan, President and Chief Executive Officer, Arkansas World 

Trade Center, University of Arkansas, Rogers, AR .......................................... 44 

ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

Adkins, David 

Letter dated June 17, 2014, to Senators Cantwell and Risch ...................... 73 

Beebe, Mike 

Letter dated June 6, 2014, to Senators and Congressmembers ................... 69 

Calhoon, Mark 

Testimony .......................................................................................................... 21 

Prepared statement .......................................................................................... 23 

Campbell, Robert 

Testimony .......................................................................................................... 14 

Prepared statement .......................................................................................... 16 

Cantwell, Hon. Maria 

Opening statement ........................................................................................... 1 

Dalrymple, Jack 

Letter dated June 13, 2014, to Senators and Congressmembers ................. 75 

Hassan, Margaret Wood 

Letter dated April 24, 2013, to Senators and Congressmembers ................. 61 

Letter dated July 1, 2014, to Senators and Congressmembers .................... 63 

Hahn, Eric 

Testimony .......................................................................................................... 3 

Prepared statement .......................................................................................... 6 

Hendrix, W. Dan 

Testimony .......................................................................................................... 44 

Prepared statement .......................................................................................... 46 

Inslee, Jay 

Letter dated June 13, 2014, to Senators and Congressmembers ................. 71 

LePage, Paul R. 

Letter dated June 30, 2014, to Senators Cantwell and Risch ...................... 65 

Pollet, Adam 

Letter dated June 23, 2014, to Senators and Congressmembers ................. 67 

Pryor, Hon. Mark L. 

Questions for the record ................................................................................... 60 

Risch, Hon. James E. 
Page

IV 

—Continued 

Opening statement ........................................................................................... 50 

Shaheen, Hon. Jeanne 

Opening statement ........................................................................................... 52 

Tyler, Donald F. 

Testimony .......................................................................................................... 9 

Prepared statement .......................................................................................... 11 

Verdon, Jennifer 

Testimony .......................................................................................................... 38 

Prepared statement .......................................................................................... 40 
(1) 

GROWING SMALL BUSINESS EXPORTS, 

GROWING U.S. JOBS 

WEDNESDAY, JUNE 18, 2014 

UNITED STATES SENATE, 

COMMITTEE ON SMALL BUSINESS

AND ENTREPRENEURSHIP, 

Washington, DC. 

The Committee met, pursuant to notice, at 3:03 p.m., in Room 

428–A, Russell Senate Office Building, Hon. Maria Cantwell, 

Chairwoman of the Committee, presiding. 

Present: Senators Cantwell, Shaheen, and Risch. 

OPENING STATEMENT OF HON. MARIA CANTWELL, 

CHAIRWOMAN, AND A U.S. SENATOR FROM WASHINGTON 

Chairwoman CANTWELL. The Senate Committee on Small Business will come to order. 

Today, we are having a hearing on ‘‘Growing Small Business Exports and Growing U.S. Jobs.’’ I know my colleague, Senator Risch, 

will be joining us, and I am sure other colleagues as well, but we 

have been urged to get started and we are going to do that today. 

So, I welcome all the witnesses here. We have a very distinguished panel and I thank them for making time to be here on 

such an important issue. I would like to make sure that everybody 

understands that my colleagues who are not here can still add 

their comments and statements for the record, which we will be 

keeping open. 

U.S. exports are an engine of economic growth and job creation. 

According to the U.S. Department of Commerce, U.S. exports have 

accounted for a third of overall economic growth in the U.S. in the 

last five years. Last year, more than 11 million jobs were tied to 

U.S. exports and one in three jobs in the State of Washington are 

related to international trade. Ninety-five percent of the world’s 

customers are outside of the United States. As the middle class 

around the world continues to grow, expanding from two billion 

today to nearly five billion by 2030, exports represent a huge economic opportunity to create jobs right here at home. 

At the same time, less than five percent of our country’s 28 million small businesses export, and the U.S. small businesses that 

are exporting, 58 percent of them are exporting to only one country. 

There is a lot of room for growth and one way to continue to help 

the U.S. economy to create U.S. jobs is to help make sure that 

these small and medium-size companies look at export opportunities. 
2 

For me, this is one of the highest priorities of this committee. I 

know the Ranking Member, Senator Risch, and I have had a 

chance to talk about these issues in our respective states, Washington and Idaho, and hear from small business people about their 

interest. That is why we are introducing a bill to reauthorize the 

State Trade and Export Promotion Program, better known as 

STEP. 

The State Trade and Export Promotion (STEP) Program has 

been an important tool for small businesses to begin exporting and 

to expand to new markets. STEP was first authorized in 2010 as 

a pilot program through legislation from this committee. Under the 

program, the U.S. Small Business Administration works with 

states so that they can prioritize help to small and medium-size 

companies. The STEP Program helps businesses identify exporting 

opportunities and to take action to break into new markets and expand further into foreign markets. Based on annual state reported data, STEP has resulted in $909 

million in export sales, representing an average return on Federal 

investment of 15-to-one. Those same investments for STEP in the 

state of Washington have, on average, had a return on investment 

of over 51-to-one. That is how much business has been generated 

by just a very, very small amount of investment to these businesses. 

Jeff and Tony Logosz, the founding brothers of Slingshot Sports, 

turned the company they started in the Columbia River Gorge into 

a global brand for water sports equipment. The company used export assistance from this program and work with the Washington 

State Department of Commerce to gain access to new global markets. They were able to shift their manufacturing back from Asia 

to the United States and create more jobs for this very rural community. 

Another example can be found in a Seattle software company 

called HasOffers, which utilized the STEP Program to showcase its 

product to mobile application developers. As a result, HasOffers is 

now working directly with four of the largest ad agencies in the 

U.K. and Europe. 

Eric Hahn is also with us today. Eric is the Vice President of Organizational Development in General Plastics Manufacturing in 

Tacoma, Washington. STEP has allowed General Plastics to gain 

access to new European partners and will tell us more about that 

in his testimony. 

Through these programs, they have been able to establish a 

physical presence in new markets, meet customers, research competitors, connect with vendors, develop new relationships, and 

these are very important things when it comes to growing a small 

business. They will show that you can make a small investment 

and turn that into a large business opportunity. 

So, this bipartisan legislation builds on the success of the pilot 

program and creates a permanent State Trade and Promotion Program within the SBA to help these small businesses continue to export. 

We have received several letters of support authorizing the STEP 

Program, and so I would like to, hearing no objection, enter them 

into the record. That is the Arkansas Governor Mike Beebe, North 
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Dakota’s Governor, and a letter from Washington’s Governor Jay 

Inslee, and a letter from the Council of State Governments. 

Chairwoman CANTWELL. In addition to Mr. Hahn today, we are 

going to hear from Donald F. Tyler from New Hampshire. Welcome, Mr. Tyler. He is the Director of Corfin Industries, and Corfin 

Industries provides component preparation services to a variety of 

industries, including the defense, medical, and telecommunications 

industry. Welcome. Using the STEP Program, he was able to help 

the company expand into new markets. And since using STEP, the 

company has grown its international revenue from about one percent to 12 percent of its overall business and hired ten new employees, so we look forward to hearing more about that. 

We also have Bob Campbell, from Virginia. Thank you for being 

here. Mr. Campbell is President and CEO of Alliance Solutions, 

and is a client of a Virginia Small Business Development Center. 

Alliance Solutions, out of Newport News, provides crisis disaster 

management services to support public safety and private sector 

clients. Mr. Campbell’s company has received assistance through 

the Virginia Economic Development STEP Program for resources 

that were used to help understand the market in the Middle East 

and their ways of doing business and to refine his strategic planning. 

Additionally, we have Mark Calhoon, from my home state of 

Washington, who is a Senior Director at our Washington State Department of Commerce, and he is going to talk more directly about 

how this program works with various businesses within the state. 

And, we also have Jennifer Verdon from my colleague’s State of 

Idaho, and she works in a similar capacity with their Idaho Department of Commerce on these STEP Programs. 

Finally, Mr. Dan Hendrix, CEO of Arkansas World Trade Center 

at the University of Arkansas, and he will discuss how Arkansas 

has utilized the STEP program to promote small businesses in his 

State. 

So, we are so pleased that you are all here. We are so excited 

about where we are, having been through the pilot stage and the 

incredible results that have come back. Now, we want to capitalize 

on this opportunity and so we look forward to your testimony. I ask 

you if you can keep your comments to five minutes. You can submit 

something longer in the record. That will give myself and others 

who show up a chance to ask you all questions. 

So, I believe we are going to start with you, Mr. Hahn. Again, 

welcome. Thank you for being here. 

STATEMENT OF ERIC HAHN, VICE PRESIDENT, ORGANIZATIONAL DEVELOPMENT, GENERAL PLASTICS MANUFACTURING COMPANY, TACOMA, WA 

Mr. HAHN. Thank you very much, Chair Cantwell. I really do appreciate the opportunity to talk with you and the members of this 

committee on behalf of the STEP Program. 

As was stated earlier, my name is Eric Hahn. I am the Vice 

President of Organizational Development at General Plastics Manufacturing in Tacoma. I am also Chair of our Tacoma-Pierce County Workforce Development Council and Vice Chair of the Wash-
4 

ington Aerospace and Advanced Manufacturing Workforce Pipeline 

Advisory Committee. I said that in one breath. 

[Laughter.] 

The company, General Plastics, started in 1941, actually, a couple of days just prior to Pearl Harbor, and started as a plastics 

company, obviously, in a whole different vein. It has grown in the 

last 73 years to be a leader in the polyurethane world, and we provide products not only to aerospace, but defense, nuclear containment, marine, construction, outdoor signage, and tooling, as well. 

We also employ about between 170 and 180 people. I say ‘‘between’’ 

because we are fast growing and a lot of that is because of what 

we are doing here in this country, but a good part of that has to 

do a lot with the STEP Program and what the opportunity it gave 

for us to enter new markets. 

As the committee considers creating a permanent STEP Program, I want to share our experience that we had with it because 

I think that it is one that can serve as a model for other small companies to not only engage in international opportunity, but to grow 

beyond just the parameters of their own backyard. 

In recent years, we have been working trying to get into the European market, to no avail. Admittedly, I do not think we really 

understood what the requirements were and how those differed 

than the aerospace requirements here in this country. A lot of that 

has to do with F/S/T, fire, smoke, and toxicity requirements that 

are a little bit different in Europe. 

We, through the grant provided by STEP, we were able to go to 

the JEC Paris 2013 and 2014 Air Show and also eventually to the 

Aircraft Interiors Show in Hamburg. It was at JEC that we discovered what the requirements were for aerospace products in that 

country. We were able to look at what our competitors were doing. 

We were able to talk directly with some of the people that were in 

the aerospace industry in Europe and they helped to give us some 

real insight into what the requirements were and how we were 

going to have to change things. 

So, immediately when we got home, we started putting our 

chemists back to work to really refine our product so it would meet 

those standards, and they were successful. In fact, at the Hamburg 

Air Show, we introduced those products and had a lot of interest 

because of it. 

Our goal was really five-fold. First, we were going to establish a 

physical presence, which we did. 

Second, we were going to meet existing customers, which we did. 

Third, we were going to research our competitor products, which 

we did. 

And, fourth, connect with local vendors. 

And, finally, of course, develop new relationships with potential 

customers. 

The results were, again, we were able to develop a product that 

is compatible with the standards that the European Union requires. We were able to get two distributors, one from the U.K. and 

one from South Africa, and we are in the final negotiations with 

one from Spain. We were able to also add approximately $100,000 

in new sales initially. It does not sound like a lot, but consider the 

aerospace sale cycle is anywhere from six months to a year. 
5 

Here is the really exciting news. We are now in negotiation with 

Airbus Tier 1 and Tier 2 suppliers, and those are estimated to provide anywhere from $1 to $2 million in additional sales. It will also 

mean the employment of ten to 15 new people. 

And, by the way, Senator, I want to personally express my gratitude for all the work that you have done with veterans and workforce and especially aerospace. We are very happy that you are our 

Senator. We have utilized those tax breaks and we are able to hire 

a lot of veterans. In fact, we now have in the last year hired probably an additional 15 to 16 people strictly that are veterans. 

So, all of this is just indicative of the opportunity that was available through STEP and that we were able to access. Our Washington people helped us out immensely, as well, to connect and understand how we were going to be able to access this program. This 

program provided opportunity for us, as a small business, that, 

quite frankly, I do not think would—we either would have never 

thought of accessing or would have been a long time coming. 

In the aftermath, we have now hired an international person 

that is a marketing director from a fairly large company that is 

really helping us take what opportunity we had from this program 

and really develop it so that, in the future, I think, we may not be 

a small business after all. 

Thank you. 

[The prepared statement of Mr. Hahn follows:] 
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Chairwoman CANTWELL. What a great story. Thank you. I will 

look forward to asking you questions. 

Mr. Tyler. 

STATEMENT OF DONALD F. TYLER, DIRECTOR, CORFIN 

INDUSTRIES, LLC, SALEM, NH 

Mr. TYLER. Good afternoon and thank you for this opportunity to 

testify today. I am Don Tyler, Director of Corfin Industries, a company that has enjoyed significant growth in export sales over recent years as a result of our participation in the STEP Pilot Program. 

Corfin’s Robotic Hot Solder Dip and other services satisfy the 

electronic component preparation needs of high reliability systems 

such as missiles, space satellites, and implantable medical devices. 

While these industries are well established outside of the U.S., for 

the first 20 years in business, Corfin experienced very little nondomestic business. The only orders that came to us from outside of 

the U.S. were from subcontractors to our existing customers. 

Three years ago, cautiously encouraged by those few orders, we 

explored paths to actively selling into these markets. Unfortunately, the costs were high as were the risks. Large trade shows, 

which are our best hope for reaching a sizeable portion of our target audience, are prohibitively expensive to a small company. We 

considered collaborating with other U.S. small businesses with a 

common goal and willingness to share expenses, but that required 

a major commitment of resources to identify and coordinate with 

these other businesses and dismissed as impractical. 

Corfin turned to New Hampshire’s International Trade Resource 

Center and the U.S. Commercial Services local office. They not only 

educated us on the skills necessary to break into markets outside 

of the U.S., but Corfin received matching funds through the STEP 

Pilot Program to realize affordable marketing opportunities. 

Corfin’s STEP-funded participation in air shows in the United 

Kingdom, France, and Singapore, and Gold Key Service introductions and translation services through U.S. embassies in Munich, 

Rome, and Tokyo have provided the jump start necessary to gain 

a foothold in these markets and grow independently. 

The success of our international sales encouraged us to become 

charter members of the New Hampshire Aerospace Defense Export 

Consortium last year. It was another STEP grant recipient. The 

Consortium provides great value in all matters related to exporting, including speakers on customs issues, education on changes to 

ITAR, and marketing opportunities. The growing membership in 

this Consortium is a great indicator of growing global impact of 

New Hampshire businesses. 

Today, Corfin’s non-domestic sales is a significant component of 

our overall growth. International sales increased from less than 

two percent of our overall revenue three years ago to over 12 percent today, all while expanding our overall revenue almost 30 percent. The non-domestic growth corresponds to 22 additional fulltime employees. I think information from earlier this year said ten, 

which the Chairwoman mentioned, but it is 22 as of today and still 

growing, a direct result of the STEP grant funding. 
10 

I am pleased to report that Corfin will be exhibiting at the 

Farnborough United Kingdom Air Show next month without the 

benefit of STEP funding. 

I enthusiastically support the STEP UP for American Small 

Business Act for the perpetual opportunities needed by small 

American businesses to reach global markets and grow their American workforces. This is a program that works. 

[The prepared statement of Mr. Tyler follows:] 
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Chairwoman CANTWELL. Thank you, Mr. Tyler, and it is so great 

to be corrected from ten jobs to 22. Thank you. 

[Laughter.] 

Mr. Campbell. 

STATEMENT OF ROBERT CAMPBELL, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, ALLIANCE SOLUTIONS GROUP, INC., 

NEWPORT NEWS, VA 

Mr. CAMPBELL. Chairwoman Cantwell, Ranking Member Risch, 

members of the committee, thank you for inviting me to testify and 

holding this hearing on the State Trade Export Promotion Program. As a graduate of the STEP Program in 2013, we have positively benefitted from the program in successfully entering the export market and growing our business internationally. 

I am Bob Campbell, founder and President of Alliance Solutions 

Group, or ASG, a service-disabled veteran-owned small business 

out of Newport News, Virginia, with ten satellite offices around the 

U.S., including your home State of Washington. As of February 

2014, we have successfully launched an office in Dubai, the United 

Arab Emirates, to extend our services into the Gulf Cooperation 

Council countries. 

ASG prepares communities for various threats through emergency preparedness activities and environmental health and safety 

services. We have conducted environmental health and safety audits for the United States Air Force worldwide and have trained 

thousands of military and public sector responders on chemical, biological, radiological, nuclear, and hazardous material response 

with approximately 2,000 training and exercise events. 

As defense and Federal spending among our customers has declined and our vision to prepare communities and improve worker 

health and safety has increased, we sought access to markets with 

expressed and unmet needs, economic capacity, and adequate infrastructure to support sustained growth of our business. 

Exporting enables us to share our expertise, experience, and values in a way that provides a value-added benefit in other nations. 

Our services promote development, security, and prosperity, while 

increasing U.S.-based revenue that we can invest in our employees 

and development of innovative products and services. 

In 2010, I made my first attempt at exporting by attending the 

Special Operations Forces Expo in Amman, Jordan. My lack of understanding of the market at that time, the regulatory environment’s presence, lack of persistency and funding limited my ability 

to capitalize fully and enter the market. 

In 2012, we included international growth in our strategic plan 

and began to identify obstacles to entry. The most significant obstacles to market entry for our business have been, number one, a 

lack of local presence; two, navigating the regulatory environment, 

both U.S. and foreign, in regards to export compliance, tax-related, 

financial, and security issues; and, number three, limited financial 

capacity to invest in exhibitions, marketing, travel, and legal consulting. 

Now that we have entered the market, new obstacles are emerging: First, price disadvantage due to both low labor costs among 

competitors and tax treatment disparity between U.S.-owned and 
15 

foreign entities when operating internationally; and, second, the 

challenge of assessing potential partners with the right due diligence and engaging in contracts in a way that adequately protects 

our interest. The complexity and multitude of risks involved are 

daunting for a small business that requires extensive legal counsel. 

Fortunately, we have had help along the way from the Virginia 

Small Business Development Center and the Virginia Economic 

Development Partnership in the form of training, resource networking, and grant funding. Through the Virginia SBDC, we participated in the Passport to Global Markets Program in 2012, and 

then promptly enrolled in the STEP Program. The STEP Program 

assisted us with approximately $20,000 for a trade mission to the 

UAE, market-specific conference and exposition participation, and 

development of our Export Compliance Program. Through STEP, 

we have been introduced to other businesses, professional resources, and the U.S. Commercial Services abroad. 

In addition to the STEP Program, we have also benefitted from 

the Going Global Defense Initiative, where matching Federal and 

State funds from the program enabled our business to become certified in quality, environmental, and occupational health and safety 

management systems, a significant competitive advantage for our 

small business like us, as these three international certifications 

garner significant credibility in the global environment. 

We continue to reap the benefits, similar to the STEP Program, 

through the Virginia Leaders in Export Trade Program. 

And, in April of 2014, we were awarded our first international 

contract in Kuwait as a result of attending that 2010 expo in 

Amman, Jordan, as well as support from the STEP Program. 

Reauthorization of this program will help enable more U.S. businesses to establish the products and services abroad, creating more 

jobs, generating more revenue and investment, promoting economic 

development abroad, as well as good will. 

Thank you again for inviting me to testify and for your commitment to helping small businesses with international trade and export. 

[The prepared statement of Mr. Campbell follows:] 
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Chairwoman CANTWELL. Thank you, Mr. Campbell. We will look 

forward to asking you some questions, as well. 

Mr. Calhoon, thank you for being here. 

STATEMENT OF MARK CALHOON, SENIOR MANAGING DIRECTOR, BUSINESS SERVICES DIVISION, WASHINGTON STATE 

DEPARTMENT OF COMMERCE, SEATTLE, WA 

Mr. CALHOON. Thank you. Chairwoman Cantwell, Ranking Member Risch, and members of the committee, thank you for inviting 

me to testify on State-level experiences and work with the STEP 

Program. 

My name is Mark Calhoon and I manage the Washington State 

Export Promotion Program. I also serve on the State International 

Development Organization Board, SIDO. States play a key role in 

helping small businesses start or expand their international sales. 

State Export Promotion Programs are typically an integral part of 

a Statewide economic development strategy that delivers a range 

of support and services to small businesses in order to drive economic growth and create jobs. 

The State of Washington has provided export promotion assistance to small businesses since the late 1970s. We are a very tradeoriented State, the fourth-largest State exporter in the U.S. 

We work closely with our Federal partners in Seattle to coordinate resources and provide the best service to small businesses. 

Our office is co-located with the U.S. Export Assistance Center, ExIm Bank, the SBA Export Solutions Group, and the Export Finance 

Assistance Center of Washington. 

The STEP Program has played a valuable role in helping small 

businesses expand export sales, and I will use some examples of 

our activities and results in Washington to show how important 

STEP is for small businesses. By way of background, Washington 

received a total of $3 million STEP funding to date. 

With STEP support, we provided export assistance to 446 small businesses, resulting in an increase of $136 million in actual export 

sales and $276 million in forecasted export sales. The results underscore the critical importance of Federal funding to Washington’s 

Export Assistance Program for small businesses. The STEP grants 

received by our State help fund successful new initiatives, such as 

our Export Voucher Program, export promotion in India for the 

first time for Washington State, and participation in a series of targeted industry trade shows in Europe. 

Participation and results from these and other STEP activities 

are on target to generate a potential return of more than $135 for 

every one dollar of STEP funds, and actual returns were $45 to one 

dollar. 

HasOffers, which Senator Cantwell mentioned, is a great technology early-stage company in Seattle that tracks the effectiveness 

of the advertising campaigns, and I wanted to give just a quick update on their export activities as a result of STEP. In late 2011, 

they had not engaged in international sales, but at that point realized their opportunities, being a web-based service provider. They 

came to us to talk about how they could get into the Europe market and we gave them an export voucher which enabled them to 

go to a key trade show in Barcelona called Mobile World Congress 
22 

and join a group of other Washington State technology companies 

in attendance in February of 2012. That resulted in first-time export sales for the company, which now represent 40 percent of their 

overall business, and allowed them to grow from 50 employees in 

early 2012 to 190 employees today. 

As Congress considers the reauthorization of the STEP Program, 

I would like to add my support to some key recommendations from 

SIDO. Firstly, that STEP should become a permanent Federal program. 

Second, to ensure collaboration, there should be a member of the 

State promotion agencies on the Trade Promotion Coordination 

Committee. It will be nearly impossible to develop a coordinated 

State-Federal plan without a seat at the table. 

Thirdly, we need to develop a working group to coordinate information sharing and report metrics to make sure Congress receives 

information it needs in a timely manner. Return on investment is 

a priority for States. 

We would like to ensure that the Federal share of funding in the 

STEP program stays at 75 percent. 

And, lastly, we would like to encourage that you make STEP reauthorization and agency coordination a priority in the current 

trade agenda. 

In conclusion, I would like to make sure that we do not take our 

focus away from the key objective of STEP, that small businesses 

are critical to the economic success of our country, and increasingly, international markets are vital to the growth and prosperity 

of small businesses. Exports create and support above-family wage 

jobs here in the U.S. and are a critical component to the ability of 

small businesses to compete and grow in the global economy. 

I appreciate the invitation and time with you today and look forward to your questions. Thank you. 

[The prepared statement of Mr. Calhoon follows:] 
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Chairwoman CANTWELL. Thank you, Mr. Calhoon. 

And now, we will hear from Ms. Verdon. Thank you for being 

here, as well. 

STATEMENT OF JENNIFER VERDON, MANAGER OF INTERNATIONAL BUSINESS, IDAHO COMMERCE DEPARTMENT, 

BOISE, ID 

Ms. VERDON. Thank you. Thank you, Chairwoman Cantwell and 

Ranking Member Risch, for providing me and, with that, the State 

of Idaho, the opportunity to testify today on the benefits of the 

STEP Program. And, also, I would like to thank you for your efforts 

in trying to secure permanent export funding for the program. 

My name is Jennifer Verdon and I am the manager for the International Business Division at the Idaho Department of Commerce. 

My team’s main focus is to support Idaho’s small and medium-sized 

Idaho companies in their export efforts. 

For the first time ever, commerce companies, and with that I 

mean non-agricultural companies, had the opportunity to receive 

export funding through the STEP Program since 2011. The impact 

of STEP in Idaho is very significant. Small companies in Idaho are 

the backbone of our economy, and according to the SBA, they create more net jobs than any large or medium-sized companies. Ninety-six-point-eight percent of all employers in Idaho are small companies. Two-hundred-and-eighty-thousand jobs are supported by 

small businesses in Idaho. To illustrate further how small our companies are, 75 percent of these small businesses have less than 20 

employees. 

On the trade side, exports and imports support 190,000 jobs in 

Idaho. Given that 80 percent of the world’s purchasing power lies 

outside of the United States, it is extremely important that small 

businesses diversify their customer base if they want to stay in 

business and continue to grow. 

Now that I have painted a picture of the small business environment in Idaho, the question remains, why do we need funding? 

Why do we need the STEP Program? The short answer is that exporting is more costly, it is riskier, and the sales cycles are much 

longer, meaning it takes longer to find partners and to find customers and to close the deal. A lot of small companies simply cannot take the risk or build the marketing budget to fund their exports. 

The State of Idaho has received STEP funding from SBA for two 

years and we have submitted the grant proposal for the third year. 

In year one, we received $292,000, and of that, we used 47 percent 

for sub-recipient grants. In year two, we received $405,000, and of 

that, we used over 89 percent for sub-recipient grants. Other activities funded through the STEP include trade shows, Governor-led 

trade missions, and inbound buying delegations. All of these are activities that are part of our usual suite of services, but with the 

STEP funding, we are able to provide more opportunities and more 

activities to small businesses. 

The results of STEP in Idaho are a testament to the success of 

the program. In two years of STEP, we have funded 110 companies. Over 18 percent of these companies were new to exporting, 

and 72 companies used the grants to break into new markets. The 
39 

ROI of year two is 35-to-one, which translates into $12.7 million of 

actual export sales. 

In my written testimony, you can find two examples of Idaho 

companies. Right now, I am going to just talk about one company, 

due to time. 

Wild Touch Taxidermy is one of many examples that would have 

not been able to expand internationally the way they have if it had 

not been for the STEP Program. Wild Touch Taxidermy is a small, 

family-owned business, and as the name gives away, they prepare, 

stuff, mount, and sell animals, all kinds of animals. Their exporting 

interest was awakened when my team arranged for them to meet 

with Taiwanese buyers. However, in order for companies to close 

the deal and find partners, it is essential for them to travel. This 

would not be possible for Wild Touch Taxidermy if it was not for 

the STEP grant. 

Just recently, Wild Touch Taxidermy, their owner, traveled to 

China with a Gold Key through the U.S. Commerce Service, and 

when he returned, he already had a sale of $30,000. That is an ROI 

of 12-to-one in the first week of his return of completing his project, 

and he is still negotiating sales. 

In closing, I would like to point out that less than one percent 

of all U.S. companies are exporters. We cannot not support exporting. Education and export counseling are necessary components, 

but without the funding, a lot of companies cannot execute. 

Thank you again for this opportunity, and thank you again for 

promoting permanent export funding. 

[The prepared statement of Ms. Verdon follows:] 
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Chairwoman CANTWELL. Thank you, Ms. Verdon. We appreciate 

that. 

We will now turn to our last witness before questioning, Mr. 

Hendrix. Thank you for being here. 

STATEMENT OF W. DAN HENDRIX, PRESIDENT AND CHIEF EXECUTIVE OFFICER, ARKANSAS WORLD TRADE CENTER, UNIVERSITY OF ARKANSAS, ROGERS, AR 

Mr. HENDRIX. Thank you very much, Madam Chairwoman, it is 

a pleasure to be here, and distinguished members of the committee. 

I appreciate the opportunity to testify before this committee to tell 

you some real stories about how the STEP Grant Program has 

been beneficial to the State of Arkansas. 

I am Dan Hendrix and I am President and CEO of the World 

Trade Center Arkansas, and we are the designated trade organization for the State by the Arkansas Economic Development Commission. And, because of that, we have been the recipient of the State 

STEP grant funds for the first two years, approximately $886,000. 

This enables us to help the Arkansas small to medium-size companies, and I emphasize that, as the other testifiers have, that it 

is very important for our small to medium-size companies to have 

the benefit of the STEP funds because of the resources that they 

do not have for their businesses to expand in exporting. 

Our rate of return for the STEP grant has been approximately 

40 percent. We have assisted over 45 Arkansas companies, and 

those companies have reported thus far over $28 million of increased export business over the last two years. 

Now, we know that the time frame for trade execution is sometimes long, so the residual effect of the STEP money that we have 

provided these Arkansas companies will be ongoing and long-lasting, because it takes sometimes 12 to 16 to 18 months to execute 

a trade deal and to get revenues flowing. So, it is important that 

this program continues, not only the fourth year but on, and hopefully permanent funding. 

Several companies that we have assisted have added jobs, and 

many of those have retained jobs, because it is important not only 

to add jobs, but also to keep those jobs. 

The trade promotion activities, we do outbound trade missions. 

We also have inbound trade delegations coming in. And, this is important because these companies have been able to benefit from the 

Gold Key Service through the Department of Commerce. And, a lot 

of times, these companies would not have gone on these trade missions. They would not have attended these trade fairs or these 

trade shows without these funds being available. It is just a simple 

matter of economics. 

And, so, with that, we have helped our Export Assistance Office 

in Little Rock to be very—to benefit from the STEP money, too. So, 

this money actually has gone back into the Department of Commerce funds by utilizing the Gold Key Service. 

We have also established the Arkansas Chapter of the Organization for Women in International Trade, which is growing significantly. Also, the FITT program, which is the Forum for International Trade Training. 
45 

These gentlemen and the lady have also talked about how important education is, and it is important that we help these companies 

to understand what it is to be in the export marketplace, and that 

way, this trade training that we offer through Export University, 

through the Export Assistance Office, through SBA, and through 

Ex-Im Bank is very important. 

The impact and value of STEP funding is certainly measurable. 

I think all here at this table have certainly reiterated that it is a 

measurable opportunity and the statistics will speak for themselves. 

The small to medium-size companies that we have talked about 

continue to miss global opportunities, and there are four things 

that a STEP grant really helps to do, and four things that are very 

important to exporters, and that is evaluating the market potential, and to evaluate market entry constraints, evaluate market 

competitiveness, and to seek distributors and agents. The STEP 

grant helps provide opportunities for all of those. 

Again, thank you, and I appreciate this opportunity. 

[The prepared statement of Mr. Hendrix follows:] 
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Chairwoman CANTWELL. Thank you very much, Mr. Hendrix, 

and that was very well said. I like the way that both you and Ms. 

Verdon categorized in very specific terms the risk factors involved 

in trade, so thank you. Thank you both for that. 

I am going to turn to Ranking Member Risch for a statement, if 

he would like to make it—— 

Senator RISCH. Thank you. 

Chairwoman CANTWELL [continuing]. And then we will start 

questions. 

OPENING STATEMENT OF HON. JAMES E. RISCH, RANKING 

MEMBER, A U.S. SENATOR FROM IDAHO 

Senator RISCH. Thank you, Madam Chairwoman. I join you in 

welcoming all of our guests here today. 

This is certainly an important endeavor for the Small Business 

Committee. I think that most Americans are aware that trade business is important. I think probably what they are not aware of is 

how difficult it is for small businesses to do this. If you are a big 

company, you have an army of lawyers and consultants and what 

have you to help you do this, but for a small business, it is very, 

very difficult. 

I think, secondly, something that most people really do not realize is how important it is, particularly in targeted industries, to 

participate in trade shows and trade conferences that go on in different parts of the world if you are going to offer your products and 

services in that regard. And, again, it is prohibitive in most situations for small businesses to participate in that. Yet, we have seen 

through this pilot program how the returns have been very substantial for investments that were made there. 

So, I am happy to be a participant with the Chairwoman as we 

move forward with trying to get this program on a better track 

than it is. I think everybody hears about the toxicity back here and 

how nobody is working together. Well, the Chairwoman and I are 

both all in on this program, and the only issue that we are trying 

to resolve is the funding issue, which seems to be the one that divides us on everything. 

But, nonetheless, having said that, we have a good general 

agreement, I believe, on how this should be done, and we have got 

our very competent staff working on finding the funds to do this 

and I am confident that we are going to be able to do that. 

So, thank you, Madam Chairwoman. Back to you. 

Chairwoman CANTWELL. Well, thank you. And, again, I want to 

thank Senator Risch, because we have been working on this. I 

think you and I see eye-to-eye on how important this is, and I do 

not know if that is a Northwest perspective, with our two economies being so focused on trade, but your leadership has been very 

helpful on this and I certainly enjoyed going to Idaho. And, I 

thought one of your business leaders said it best when he said, exporting is not for wimps. 

[Laughter.] 

I think that what he meant was that you need to have a real 

stomach to go and approach these market opportunities. So, we had 

a lot of good testimony from people from both our states. 
51 

Senator RISCH. We did, Madam Chairwoman, and again, I am 

not familiar with every State, what they do in that regard, but certainly, Idaho, through the Department of Commerce and the State 

of Washington, the things I have heard, they are also all in on the 

efforts that we are making here, particularly for the small businesses, and we thank you, certainly, for those efforts. 

Chairwoman CANTWELL. Good. Well, let us turn to some questions, and I did want to follow up on trying to characterize the benefits of the program in specific terms. Obviously, as my colleague 

just said, we see the benefits of it very clearly in our States, but 

maybe not all our colleagues do. You clearly articulated that there 

are risk barriers to trade, Ms. Verdon, and you talked about high 

costs, high risk, obviously very small marketing budgets, and the 

smaller you are, the less experienced team of people to assess those 

opportunities. 

So, the first three of you and Mr. Hendrix, I wanted to see if we 

could get some comment about whether you were exporting before 

using the STEP Program. So, is the STEP Program just providing 

that extra incentive that is helping businesses focus on this? Is 

that what it does? It just breaks down that risk barrier? 

Mr. HAHN. Senator, I do not know if it is necessarily—I guess, 

here is my feeling on it. I think what the STEP Program does is 

it allows us to take our dreams and formalize those into actions. 

You know, as was stated earlier, we did not have a lot at our disposal in terms of technical expertise, in terms of, you know, money 

to actually go overseas. We were doing very well at home, and we 

are actually very satisfied, I mean, because Boeing being one of our 

largest customers, we thought—we were very content. 

And, I think when we were approached by this program, that all 

of a sudden, I think it just turned a light bulb on, and as I said 

earlier, it allowed us to take those dreams—because we had already always talked about, someday, we were going to go overseas. 

Someday, we were going to be this great exporter of materials. 

And, as I think this gentleman said earlier, you know, we were 

doing some international, but it was coming through distributors 

that were based in the United States that were actually selling to 

people overseas and they were utilizing our products in the mix, 

but we never saw the actual end customer and we never really engaged in that actual end customer. 

And, so, this program gave us—opened that door. It allowed us 

to not only see and talk to that end customer, but to create a relationship that ultimately culminated in a very strong sales pipeline. 

Chairwoman CANTWELL. And, so, you would have just waited 

until a later point in time to create an export strategy, or it just 

gives you the ability—you had one in mind, but you just could 

not—you did not have the resources to execute on it. 

Mr. HAHN. We did not have the resources to execute on it. And, 

as I said, you know, yes, to answer your question, we would have 

probably just waited. We would have looked for secondary opportunities through companies based in the United States that were 

doing business overseas and probably would have been content 

with that for a while. But, gladly, or thankfully, this program came 

along, and I think not only jump started our efforts, but I think 

we are doing great because of it now. 
52 

Chairwoman CANTWELL. Good. Mr. Tyler or Mr. Campbell, do either of you want to add to that? 

Mr. TYLER. Certainly, we will agree with it. We had an export 

plan that really had no timeline that went with it. We knew that 

if we wanted to do something like an air show or a large trade 

show, that would be a $14,000 ticket just to get in the door, and 

then we would have travel expenses, and then we would really 

need to have some representation over there to follow through, and 

those are all high-dollar and high-time involvements. And, we really did not know what we were doing, so we needed some help from 

professionals, and, of course, they needed funding. 

I spoke that some of the help that we had from the New Hampshire International Trade Resource Center is partly also a result of 

the STEP funding. So, we were going to get nowhere, probably, 

without this. Of course, this brought the cost down significantly for 

us to get in the door, and at the time, we were maybe 60 people 

when we really started kicking off. We are about 120 now, and as 

I have said, about 22 of that is from the export sales that we do 

today, and that is something we normally can afford. 

That is why I was happy to say in my testimony that the things 

we are doing today are not requiring continued STEP involvement. 

So, a success as I see it. 

Chairwoman CANTWELL. You are a STEP graduate. 

Mr. TYLER. There we go. 

[Laughter.] 

Chairwoman CANTWELL. Mr. Campbell. 

Mr. CAMPBELL. I echo those comments, but I would also add that 

the STEP Program accelerated our path to entering the global market. I tried it on my own in the past. It took a little bit of effort 

to try to get there, and I could tell that it was going to take a lot 

longer without some type of help from professional resources and 

the networks from our State VEDP and SBDC, the things that they 

have put in place for us, the training, the other resources. So, it 

is not just about the money. The money is the means to the end. 

But, as an entrepreneur, I like to take that money, invest it into 

the business, and see the business grow, and we have already 

started to see some return on investment in a short time. 

Chairwoman CANTWELL. Great. Thank you. Thank you. 

Senator Risch. 

Senator RISCH. I will yield to my distinguished colleague, Senator Shaheen. 

OPENING STATEMENT OF HON. JEANNE SHAHEEN, A U.S. 

SENATOR FROM NEW HAMPSHIRE 

Senator SHAHEEN. Thank you very much for holding this hearing 

and for the effort to reauthorize the STEP Program. 

And, I want to welcome Don Tyler from Corfin Industries in New 

Hampshire. I have had the opportunity to visit Corfin and I have 

seen the impressive services they provide to so many industries 

and really hear firsthand about the difference that the STEP Program has made for you all. 

I think you pointed out that you have been able to add 22 additional employees as a result of the program, which I think is very 
53 

impressive, and it speaks to the importance to small businesses 

and why we need to provide this assistance for exporting. 

You know, one of my favorite statistics is that 95 percent of markets are outside of the U.S., but only about one percent of small 

and medium-size businesses do business outside of the U.S. So, 

that says it all when it comes to why this program is so important. 

Madam Chair, before I ask my questions, I just wanted to enter 

into the record a letter that I received from the Program Manger 

of the International Trade Resource Center of New Hampshire 

which speaks to the importance of the STEP Program and also the 

concern about the match percentage, which I know has been under 

discussion. But, for small States like New Hampshire, being able 

to maintain the 25 percent State match is really important, because we have fewer resources, fewer employees who can help our 

small businesses. 

So, I would like to enter this into the record and just point out 

that one of the statistics she cites in this letter is that in 2013, 

New Hampshire actually had the highest percentage increase in 

exporting in the country and how important the STEP Grant Program was to making that happen. And, one of the real benefits we 

were able to accomplish through the program, which, Don, you may 

have spoken to in your testimony before I got here, is the Aerospace and Defense Export Consortium, because that has provided 

a real opportunity for so many businesses in the State. 

So, if I could enter that into the record. 

Chairwoman CANTWELL. Without objection. 

Senator SHAHEEN. Thank you very much. 

So, Don, I wonder if you could talk about—you talked about the 

number of employees you were able to add as the result of the exporting that you have done. Can you also talk about how STEP 

helped in terms of building relationships with future customers and 

how you see that playing a role in your increased exporting. 

Mr. TYLER. Certainly. The previous efforts we had made to try 

to get into export, mostly Europe, had been speaking engagements 

at technical conferences, and, of course, that is a once-a-year event 

and you can persuade somebody that you have got a great product, 

but if you do not really have a presence there, you are quickly forgotten, and I think that was our biggest issue, is we needed to be 

there more often. We needed to have representation. 

The goal of—or, the effort of trying to find representation was a 

little beyond us. We really did not know where to start, and again, 

the International Trade Resource Center and the Commercial Service, the U.S. Commercial Service that did the Gold Key Service, 

that was our primary goal with those Gold Key Services, was to try 

to find good reps. 

We succeeded in the U.K., Spain, France, and Italy so far, and 

we are still looking in Germany. So, by having those folks there, 

of course, in the same time zone, so when somebody wants to pick 

up the phone in the morning, they are able to talk to somebody 

other than waking me up on a mobile phone and I am a little groggy. 

But, they are having that familiarization. They are having people 

that come and visit them once a month and talk about new developments that are happening back at the factory. We take those 
54 

reps to our factory so that they keep educated on what we are 

doing, as well. And, of course, all that business does come into New 

Hampshire. None of the services are actually performed outside of 

the State of New Hampshire. 

Senator SHAHEEN. And, can you—you may have said this in your 

testimony, but how much have you seen your export growth expand 

since getting the STEP grant and really making a full-blown effort 

at exporting? 

Mr. TYLER. I think we started at about 1.3 percent of our overall 

revenue was from outside of the U.S. about three years ago, and 

now, we are 12 or 13 percent, and that is growing at a nice rate. 

But, what is more important is that is not 12 or 13 percent of the 

same overall revenue. The overall revenue has grown 30 percent in 

that period of time, too, so we are doing pretty good. But, that is 

a big part of it right now and I am confident this time next year 

I will be bragging about some big things that are in the works 

right now. 

Senator SHAHEEN. Good. Well, hopefully, we can get this reauthorization done and that will help. 

Mr. TYLER. Please. 

Senator SHAHEEN. Mr. Calhoon, you mentioned the importance of 

cooperation between State and Federal entities in helping small 

businesses export. A couple of years ago, my colleague from New 

Hampshire, Senator Ayotte, who was at that time on the Small 

Business Committee, and I hosted a hearing of the committee in 

New Hampshire and we heard from New Hampshire businesses, 

and that is one of the things we heard from officials in our Trade 

Office in New Hampshire and from some of the small businesses, 

that there would be real benefit to having more cooperation between States and the Federal level in trade initiatives. 

You talked about putting—I think what you said was putting the 

State person on some of the Federal committees. Is that what you 

are suggesting? 

Mr. CALHOON. The solution we came up with in Washington was 

in our office in Seattle is to co-locate with the U.S. Export Assistance Center. We have an Ex-Im Bank representative in Seattle. We 

have an SBA Export Solutions Regional Manager, and then a 

Washington State Export Assistance Center. So, we are all co-located. 

You know, those companies can speak to this. I think we overwhelm them with material and they are confused, I think, oftentimes, about what all these different programs are, what is the best 

one for them, where should they fit in, and I think when we can 

coordinate all of our efforts and put it together—we formed a 

Washington Export Outreach Team last year in our State and 

launched our first event on Monday this week, so we are starting 

a series of day-long Export 101 programs around the State that all 

of the State and Federal agencies are coordinating on and participating in, again, to try to lessen the confusion for small businesses 

on which door is the right door. 

Senator SHAHEEN. Thank you. 

As the result of the hearing that we held in New Hampshire, we 

introduced some legislation called the Small Business Export 

Growth Act, and one of the things we would create as part of that 
55 

legislation is a working group on the Trade Promotion Coordinating Committee to identify ways that would improve coordination. We have had some success in New Hampshire with co-locating, although, because of a loss of State resources, much of that has 

disappeared and is being rebuilt now. 

But, do you have any thoughts about whether this kind of a 

working group might be helpful in recommending more ways to cooperate? And, if anybody on the panel wants to weigh in on that, 

feel free to do so, as well. 

Mr. CALHOON. And, one of the SIDO recommendations is actually 

to try to add a State-level person onto the Trade Promotion Coordination Committee, which we think would be vital to try to get that 

true Federal-State partnership, that without a seat at the table, it 

is hard to get the level of coordination. 

Senator SHAHEEN. Right. 

Mr. CALHOON. So, that would definitely be one recommendation 

we would support. 

Senator SHAHEEN. Thank you. Thank you, Madam Chair. 

Chairwoman CANTWELL. Senator Risch, would you like to ask 

questions? 

Senator RISCH. I will yield back. Thank you very much, Madam 

Chair. I think this has been a great hearing and, again, has underscored for us the importance of this program. I am looking forward 

to everyone on the committee working together to try to make this 

work. 

Chairwoman CANTWELL. Great. Thank you. 

Well, I have a few more questions from some of the testimony. 

My colleague has brought up this issue about State and Federal 

match, but also, there is an issue of whether the grants should be 

allowed to be spent over a two-year period of time as opposed to 

one year, and I do not know if anybody wants to comment on that. 

Maybe the people at the—yes, Mr. Hahn. 

Mr. HAHN. Yes, Madam Chair. You know, as I spoke earlier, the 

aerospace selling cycle is fairly long. I think that having it spread 

over two years would be highly beneficial. I mean, it would—not 

necessarily that maybe we—maybe it was not necessarily critical in 

our case that we had that second opportunity, because I think that 

we did have grant money to go that second year, as well. But, what 

that demonstrates, I think, is that, because of the sales cycle, that 

if you are able to not only make that initial contact and then sustain that relationship and build upon that relationship by being 

able to attend subsequent shows, I think it would be highly beneficial. 

Chairwoman CANTWELL. Mr. Campbell, did you want to add to 

that. 

Mr. CAMPBELL. Yes, Senator. I also think it would be beneficial 

to have a two-year program. In my testimony, I mentioned two 

other programs that are also helping our business. So, we graduated from STEP and then we entered two other programs within 

the State of Virginia that have helped us, not just with funding, 

but with networking of other resources, getting us in contact with 

other entities, performing some services like getting our ISO certifications. 
56 

We are also now registered with a Virginia exhibition booth that 

they will have at a major conference in the Middle East next year 

and we will be part of that at a fairly discounted rate. So, it helps 

us financially, but it also helps us with credibility that we are 

going to be showing at a major exhibit with the State of Virginia 

and other businesses. 

So, a two-year time scale, I think, is beneficial, especially in 

these markets where, for instance, we are looking at Saudi Arabia 

right now and it takes six months to a year from the time you 

make the decision to get started and you make the application to 

set up a business there, to the time you may even hear back from 

them. That does not include the time it may take to find the right 

partners to enter into some agreement with, which could be a longterm agreement. 

And, so, a two-year program certainly would be beneficial for entering the market, but then we also need to think about sustaining 

once the business is there. What are the next challenges that a 

business will face? 

Chairwoman CANTWELL. Okay. Yes, Mr. Hendrix. 

Mr. HENDRIX. At the end of the grant, a two-year—second year 

grant period, we had over 15 Arkansas companies that had—qualified companies that had applied for STEP grant funding. And, of 

course, the money has to be spent and allocated before that year 

was up. So, having a possible two-year spread would enable us to 

possibly have given some of those 15 companies some of the funds 

where we were trying to push and push and get that money out 

the door. So, I think that a two-year program would be beneficial, 

I think, for us as an administrator of the funding. 

Chairwoman CANTWELL. Okay. And, Mr. Calhoon mentioned 

metrics. So, how do we get—is that something we have, or that is 

at SBA, or we put more teeth into what States have to do, or how 

do we get better metrics? I mean, many of you have provided great 

metrics, but, obviously, we want to learn from this, and so what is 

the recommendation? 

Ms. VERDON. I think having a two-year program would be beneficial on the metrics side. We heard that the sales cycles are longer 

for international deals. Right now, we are only reporting on one 

year. If we would be collecting results from STEP year one, we 

would actually have higher numbers, because some sales just do 

not come in in the first year. They take two years to close that 

deal. 

I think we are doing a great job in collecting the results. It is 

a matter of defining what we need to be collecting. If we want actual sales, no problem. We can collect actual sales. Estimated sales, 

we can collect estimated sales, but, there is a question of how valid 

estimated sales are. We would rather collect actual sales. 

Chairwoman CANTWELL. Well, somebody mentioned—somebody 

on this end, I think, mentioned forecasted sales, which I think 

what they are basically—most companies have very prudent booking of sales forecasts. You know, even if they close a big deal, they 

will book that over several quarters or several years just so that 

they guarantee that it will actually come in. And, so, I do not know 

who, if somebody down here mentioned that or wants to comment 
57 

on that, but, I think, from an accounting purpose, someone believed 

that those were actual sales, is that correct? 

No one remembers who mentioned forecasting? Somebody gave 

me a number on actual sales, and then forecasted sales. 

Mr. HAHN. Yes, I did, Senator. 

Chairwoman CANTWELL. Okay. 

Mr. HAHN. I am sorry. Yes. No, the forecasting was really projecting what the potential for this several deals that we have in the 

offering now that we are currently negotiating. You know, the 

money that comes in is going to be significant. We just do not know 

what it is right now because we do not know what the volumes are 

going to be. But, that is why I made the comment that we are looking at an additional $1 to $2 million, depending upon what kind 

of volumes they start out with and, ultimately, you know, if those 

volumes are sustained. 

We have every confidence that, just because of the way aerospace 

works, that once you are spec-ed into a product, it is pretty hard 

to lose it unless you lose it yourself through poor quality or performance. So, we anticipate that that $1 million is conservative and 

that the $2 million is likely or potentially likely, and then who 

knows where it will go from there. 

Chairwoman CANTWELL. Okay. Great. 

Senator Shaheen, do you have any more questions? 

Senator SHAHEEN. I just have one more. One of the things that 

has been pointed out to me is that, oftentimes, when we are exporting, or when you are exporting, you are competing against other 

companies that have subsidies from the governments where they 

exist, and that one of the things that STEP does is help to level 

that playing field in a way that is really important to our small 

businesses. And, I just wondered if anybody had had that experience with companies exporting, that you know your competition 

overseas is getting a subsidy in some way from the country where 

they operate and what kind of a challenge it presents. 

Mr. CAMPBELL. Well, I do not have a lot of details, Senator, but 

I do know that it exists, and I think I mentioned in my testimony, 

also, some disparities or differences in tax regulations of treatment—— 

Senator SHAHEEN. Right. 

Mr. CAMPBELL [continuing]. For companies like ourselves. So, 

that exists, so we have to find other ways to compete and work 

around that to compete more on value and the product and the 

service that we are providing, knowing that we are going to be 

higher priced. The good news for us is that we are in a market 

where they love U.S. companies, so that helps a lot. But, now I 

need to stand behind that with the quality, the services that we 

provide, and show the value that makes up that difference so that 

I can compete competitively. 

Senator SHAHEEN. Thank you, and that is one of the real benefits 

of STEP, is that it helps you offset some of that. 

Thank you, Madam Chair. 

Chairwoman CANTWELL. Great. Well, I want to thank all our witnesses. This is a great discussion. We appreciate the hard work 

that you are doing in helping our country grow jobs, and we certainly want to thank the representatives of the various agencies of 
58 

the Departments of Commerce at the local level. Thank you for 

your work on all of this. We look forward to moving this legislation 

and making it an ongoing program so we can continue to grow exports. But, thank you all very much. We appreciate it. 

We are adjourned. 

[Whereupon, at 4:06 p.m., the committee was adjourned.] 
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